If you don't mind messing with the insides of your box there is a way.

You solder some wires on one of the cards, and it allows you to mod your Xbox. Now I have heard that they have been shutting down these "modified" xbox's lately since they found out what people were doing, but for a while there was some hacks running around.

They also found a way to get free xbox live if I am not mistaken, and people were getting all sorts of other free stuff on these "modded" xbox's. Tho Microsoft will not allow anything to harm their sales for long, so whatever the method it will always be short lived.

It was 2007 when they ran the first batch of unassigned code I believe, Microsoft was using a 320+ bit encryption code or something insane like that, so it was virtually impossible to crack. They ended up exploiting an un-patched piece of the code, since cracking the encryption would take decades.

http://en.wikipedia.org/wiki/Homebrew_%28video_games%29
(Scroll down to 7th gen Xbox360 section)
According to this it seems they patched this method in 2008, but I know there is other methods out there, just extremely underground, and hard to find. Microsoft has done a pretty good job at making their console virtually un exploitable, so if you want to play with hacks I would advise getting a PS3 since they are quite a bit easier from what I understand.

A while ago when i was researching this for the 360 i found a compatible mouse and keyboard for the 360 that was fully modded that looked like semi-hacking the game. Almost came to buying one and they were fairly cheap.

The xim1 with autohotkey macros beats the best modded controllers.
The only thing better is a xim2
I have burst fire ,recoil compensation full auto whatever i want.

And play with a keyboard and mouse.
Sample macro
Code:

#NoEnv
SendMode Input

~Space:: ;Use the space key to quickly toggle the script on & off
Hotkey, ~LButton, toggle
If toggle != 1
{
toggle := 1 ; Will beep if it is set to on
SoundPlay *64 ;Good because it plays over primary speakers. Others tend to play on motherboard speakers. It's 2008 many computers no longer have motherboard speakers!
}
else
{
toggle := 0 ; Will beep if it is set to off
SoundPlay *64 ;Good because it plays over primary speakers. Others tend to play on motherboard speakers. It's 2008 many computers no longer have motherboard speakers!
}

Okay PC Modded controllers a mad. You can make one just going to your local electronics store search on google. Okay more to the point. For hacking your console you need to dump the 360 nand and flash it . Then your dumping microsoft allowing you to run homebrew codes. For E.G you can get a XEX menu 'You need a transfer cable' and download some hacks from TTG you need to change the patch and transfer the code over . Theres a lot more to it. But thats the main thing.

If you live in NZ/Aussie i can do this to your xbox. The Dash needs to be 2.0.84xx.0 or bellow.